Profit taking snaps market’s 6-day rally

MANILA, Philippines — The stock market succumbed to profit taking yesterday, snapping its six-day winning streak.

The Philippine Stock Exchange index closed the week in the red as it fell by 0.43 percent or 26.33 points at 6,161.89.

The broader All Shares index likewise dropped by 0.38 percent or 12.52 points to settle at 3,316.86.

“On the last trading day of the week, the local bourse dropped by 26.33 points as investors took some gains following six consecutive days of a market rally,” said Claire Alviar of Philstocks Financial.

She said the hawkish remarks from Federal Reserve chair Jerome Powell also weighed on the market’s sentiment. 

“Philippine shares finally succumbed to profit taking, after Fed Chair Jerome Powell said the central bank is not confident it has done enough in the battle against inflation,” Regina Capital’s Luis Limlingan noted.

“Here at home, it was quiet after the positive surprise release of the Philippines’ GDP,” he added.

Local counters were covered in red, except for services which eked out a 0.43 percent increase.

The property index suffered the biggest blow, declining by 1.31 percent.

Value turnover thinned to P2.76 billion. Market breadth was negative as decliners crushed advancers, 102 to 65, while 45 stocks were unchanged.

Other Asian stocks sank yesterday after Powell warned he “will not hesitate” to hike interest rates further in his quest to bring inflation to heel.

His comments brought down the curtain on a rally across equities sparked last week when officials hinted that their long-running tightening cycle may be at an end.

They came as other key decision-makers have lined up to suggest that while recent data has suggested the hikes are kicking in, traders should be aware that more measures could be needed if prices remain elevated.

Powell told an International Monetary Fund conference Thursday that “progress toward our two percent goal is not assured”.

“If it becomes appropriate to tighten policy further, we will not hesitate to do so,” he said.

While policymakers were “committed” to achieving a sufficiently tight monetary policy stance, “we are not confident that we have achieved such a stance”, he added.